As the earnings season wraps up for North American gold miners, the biggest surprise has been out-sized market reactions, with\u00a0Kinross Gold Corp. surging the most in almost a year and\u00a0Barrick Gold Corp. tumbling.<\/p>\n
Barrick, the world\u2019s biggest bullion producer, lost 11 percent\u00a0on April 25 in more than double average trading volume after missing analysts\u2019 estimates for only the second time in seven quarters.\u00a0The last time Barrick had such a sizable earnings disappointment, in the first first quarter of 2015, its shares rose the next day in average volume.<\/p>\n
On Wednesday, Kinross soared as much as 17 percent in heavy volume on a one-cent earnings beat, while\u00a0fellow Toronto-based miner Agnico Eagle Mines Ltd. jumped 11 percent on April 28, the day after its street-beating results. Agnico Eagle edged out Kinross for the biggest beat over analysts expectations in percentage terms — 189 percent higher than estimates.<\/p>\n
\u201cWe\u2019ve seen just huge moves,\u201d Josh Wolfson, an analyst with Eight Capital, said by telephone from Toronto. \u201cGenerally the market has reacted with larger-than-expected movement.\u201d<\/p>\n
The hefty punishments and rewards haven\u2019t been limited to the gold industry. Top U.S. aluminum producer Alcoa Corp. surged as much as 9.7 percent after beating estimates while U.S. Steel Corp.\u2019s surprise quarterly loss spurred a whopping 27 percent drop, its steepest on record. A miss by Cliffs Natural Resources Inc. sent the iron-ore producer\u2019s stock down as much as 13 percent.<\/p>\n
\u201cIf you had even a nominally good result you got very handsomely rewarded for it. If you had nominally negative results you got brutally punished for it,\u201d Michael Siperco, an analyst with Macquarie Capital Markets, said by phone from Toronto. \u201cAt the two ends of the spectrum are Barrick and Kinross especially.\u201d<\/p>\n
Neither Siperco nor Wolfson offered a clear reason for the dramatic moves, although Wolfson speculated it could be skewed by exchange-traded-fund activity in a market in which volume had slipped over the past year.<\/p>\n
\u201cThe influence of both the ETF market and the quants have been more meaningful, especially in light of the lower volumes,\u201d Wolfson said. \u201cSome of these moves are larger than would otherwise be supported strictly\u00a0by fundamentals.\u201d<\/p>\n
Kinross said in an emailed response to questions that investors were reacting to the company delivering on its commitments. A spokesman for Barrick didn\u2019t immediately return a call seeking comment.<\/p>\n
Source: Bloomberg<\/p>\n","protected":false},"excerpt":{"rendered":"
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